Interferon-gamma (IFN-gamma) has been reported to up-regulate transcription of the xanthine dehydrogenase (XDH) gene and to regulate XDH and xanthine oxidase (XO) activity in endothelial cells and liver tissue. Macrophages are a source of XDH/XO activity at inflammatory sites and are functionally regulated by IFN-gamma. We studied the effect of IFN-gamma on XDH and XO in rat bone marrow macrophages, rat alveolar macrophages, and murine RAW cells. Instead of an induction of enzyme activity, XDH/XO activity was almost totally lost after incubation with 100 to 1,000 U/ml of IFN-gamma for 24 h in all three cell types. The loss of cell-associated XDH/XO activity was not correlated with the appearance of XDH/XO activity in the media. In addition, the loss of XDH/XO activity could not be accounted for by transcriptional repression, since there was an increase in steady-state levels of XDH mRNA. To determine whether XDH/XO activity might be lost through nitric oxide-mediated inactivation of XDH/XO, we compared the time course and dose response for XDH/XO inactivation with that of nitric oxide production and found them similar. Treatment with the nitric oxide inhibitor N-monomethyl arginine appeared to totally block inactivation of XDH/XO by IFN-gamma. We conclude that upon stimulation with IFN-gamma, inducible nitric oxide in macrophages leads to post-transcriptional inhibition of XDH/XO, possibly minimizing the potential for tissue injury from XO released from macrophages into the inflammatory milieu. Inactivation of XDH may represent yet another "protective" role for nitric oxide at sites of inflammation.